Respa Compliance And Marketing Services Agreements
Consistent with the Court of Appeal`s decision, the CFPB`s new FAQs clarify that a resolution service provider may pay another entity under an MSA for marketing services that are actually provided where (2) the amount of compensation paid is “reasonably related to the fair value” of those services alone. Also remember that the Bureau is not the only regulator empowered to enforce RESPA violations. The Dodd-Frank Act allowed states to take legal action under the Consumer Financial Protection Act, and many attorneys general have indicated their intention to strengthen their investigative and enforcement measures against those who violate respa. The laws of many states also make mortgage lenders an obligation to comply with federal laws such as RESPA. Indeed, several States have been particularly active in their monitoring and surveillance of compliance respa, and The attention of States to this area of compliance is currently increasing. On the brighter side, the Bureau`s interpretation of section 8 of RESPA amounts to a simple reading of the statute. Consistent with RESPA`s historical interpretation, all fees paid under an MSA must reflect the fair value of the advertising and marketing services actually provided, as compensation for recommendations is prohibited. If the advertising or marketing costs are greater than fair value or if the fee varies according to the volume of business generated by the relationship, a regulatory authority may conclude that such payment is actually made for recommendations and not for marketing services that would be contrary to RESPA. Also remember that HUD`s previous guidelines in this area generally do not allow you to pay for direct marketing to certain customers. This meant that even if the only actual compensation paid under an MSA was the fair value of the non-removal services actually provided, such as for example. B general advertising services, the MSA could contravene RESPA if unpaid references had been made. The office`s position appeared to be contrary to Section 8(c)(2) of RESPA`s Safe Harbor, which allows for appropriate compensation at the fair value of the goods or services actually supplied.